National Grid, UK Energy’s Biggest Fat Cat, Posts UK Profits of £2.9 Billion at a Margin of 38%
In response to National Grid’s 2015/16 results out today, Mark Todd, co-founder of energy price comparison site, energyhelpline has made the following comments:
“National Grid are the biggest fat cats in the UK energy industry and with their UK profits reaching new record heights of £2.9 billion they are the fat cat that just keeps on getting fatter.
These profits are even higher than last year’s eye-watering £2.5 billion and come at a margin of 38% for supplying gas and electricity down pipes and wires – hardly a cutting edge activity. What’s more National Grid is making make billions running an infrastructure much of which was built by the state and OFGEM just allows them to fly under the radar year after year and fleece all of us.
In the US, the regulator is not so foolish. It only allows them to make a 16% margin. If National Grid’s margins were cut to US levels, the savings to the UK would be £1.7bn. This is a £1.7 billion failure by OFGEM costing all UK households and businesses £57 each per year. If OFGEM are not willing to regulate National Grid properly we should get a new regulator who will.
It’s time for Ofgem to adopt a much stronger stance, enforce an immediate emergency price cut of 25% on National Grid to bring their profits to US levels and start to fight for the people they are supposed to represent – the man on the street not the fat cats in corporate headquarters.
The company’s operating profit margin of 37% blows most other businesses out of the water. Centrica (that owns British Gas) and SSE both make a 5.2% profit margin, Sainsbury’s 3%, Google now Alphabet 20%. Apple is up with them though on 39.7%. Are OFGEM seriously saying that National Grid is a company as innovative as Apple? How can they preside over a regime where such obscene profits are made?
Today, the National Grid is the cat that got the cream and Ofgem has been shamed for failing UK customers again. National Grid needs to be put on strict rations if UK households are to be stopped being ripped off for their energy bills.”
National Grid’s Obscene Profit Levels in the UK & Savings Possible through US-Style Regulation
|Country||Revenue (Millions)||Operating Profit
|UK Operating Profits @ US Levels (15.9%)||£1,195|
|Saving to UK Consumer through similar regulation to US||£1,693|